SMT. KILASHO DEVI BURMAN AND OTHERS vs. COMMISSIONER OF INCOME-TAX WEST BENGAL, CALCUTTA

CIVIL APPEAL No. 2242/1978Supreme Court[1996] 2 S.C.R. 30108 February 1996Bench: 2 JudgesAuthor: S.P. BHARUCHA, S. SAGHIR AHMAD SMT. KILASHO DEVI BURMAN AND OTHERS A7 pages
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What were the facts?

The assessee, Smt. Kilasho Devi Burman and others, appealed against a High Court judgment that favored the Revenue. The dispute concerned assessment years 1958-59 to 1962-63. For assessment year 1955-56, the assessee, as Karta of his HUF, filed a return. The Revenue's assessment order for this year was unsigned, and there was no signed assessment form. A demand notice with initials existed, but the assessee claimed non-receipt of statutory notices, the demand notice, and the assessment order. An acknowledgement slip signed by 'Phool Singh' was on record, but the assessee stated Phool Singh had no authority to receive notices. The Income Tax Officer initiated proceedings under Section 147(a) for escaped assessment, leading to assessments on the HUF, which the assessee contested. The Income Tax Appellate Tribunal allowed the assessee's appeal, finding no valid assessment for 1955-56. The Revenue sought a reference to the High Court, which found the Tribunal's conclusion perverse.

What did the Supreme Court hold?

The Supreme Court held that the High Court, in reference proceedings, exercises advisory jurisdiction and cannot go behind the facts found by the Tribunal. A conclusion is perverse only if no reasonably instructed person could have arrived at it based on the record. The High Court erred by relying on an 'admitted facts' statement annexed to the Revenue's reference application, which was not part of the Tribunal's Statement of Case regarding Phool Singh receiving notices. The Tribunal had not found that Phool Singh received earlier notices on behalf of the assessee. The High Court should have required the Tribunal to ascertain such facts if necessary. Crucially, the Revenue failed to produce a signed assessment order for AY 1955-56, which was central to its case. The Court cited Kalyankumar Ray v. Commissioner of Income-Tax, 191 ITR 634, emphasizing that an assessment order must be signed or initialled by the Income-Tax Officer to be complete. Since a valid assessment for 1955-56 could not be established, the Revenue's case failed, and the Tribunal was correct. The appeal was allowed, setting aside the High Court's judgment and restoring the Tribunal's order.

What were the issues?

1. Whether, on the facts and in the circumstances of the case, there was a valid assessment on an HUF for the assessment year 1955-56? (Question of law and fact, turning on Section 143(3) of the Income Tax Act, 1961). 2. If the answer to question no. 1 is in the affirmative, then, whether on the facts and in the circumstances of the case, the assessments for 1958-59 to 1962-63 in the status of HUF are valid? (Question of law and fact). Assessee's contentions: - Neither statutory notices nor the demand notice nor the assessment order were received by him. - No person had any authority to receive any notice on his behalf. - During the relevant assessment years, there was no HUF, and no valid proceedings could be taken against it. - The HUF had never been assessed, so there was no reason to make an application under Section 25A of the 1922 Act. Revenue's contentions: - There was an assessment on the HUF for AY 1955-56, as evidenced by the order for that year. - So long as that assessment stood, it was permissible to proceed against the HUF, as it was presumed to exist until an order under Section 25A of the 1922 Act was passed. - The factual findings of the Tribunal were unsupported by evidence, unreasonable, and perverse.

Which sections of the Income-tax Act were involved?

Section 143(3),Section 256(1),Section 147(a),Section 139,Section 22,Section 148,Section 139(2),Section 25A

AI-generated summary — verify with the full judgment below

.~ SMT. KILASHO DEVI BURMAN AND OTHERS A v. COMMISSIONER OF INCOME-TAX WEST BENGAL, CALCUTTA FEBRUARY 8, 1996 [S.P. BHARUCHA ANDS. SAGHIR AHMAD, JJ.) B Income Ta.'C Act, 1961: Section 143(3).

Income Tax-HUF-Assessment of-Signed assessment order or f onn for relevant assessment yew~Absence of-Held : there was no valid assess- C ment.

Section 256 (1)

Income Tax-Referenc~Jwi iction of High Cowt-Scope of-Held: High Cowt could not go behind facts found by T1ibunal. D Words and Phrases : "Pe1verse Conclusion''-Meaning of in the context of Section 256( 1) of the Income Tax Act, 1961. The appellant - assessee had submitted a return for the relevant assessment year as the karta of his H.U.F. The assessment order on the record of the Revenue bore no signature. There was no signed copy of the assessment form. There was a demand notice with some initial or signature E on it. On the record there was an acknowledgement slip signed by some person. There was no material to show that the demand raised in the F demand notice had been paid by the appellant-assessee.

The Income Tax Officer took proceedings under Section 147 (a) of the Income Tax Act, 1961 and concluded tha

The order continues below.

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